Pharmaceutical Marketing Strategy PDF

Lecture 5 Associate Professor Dr. of Pharmaceutical Management and Economics Mohamed Bahlol 1 2 1. Standardization and Adaptation Review in Pharmaceutical Marketing Promotions International business has dramatically been exp...

Lecture 5 Associate Professor Dr. of Pharmaceutical Management and Economics Mohamed Bahlol 1 2 1. Standardization and Adaptation Review in Pharmaceutical Marketing Promotions International business has dramatically been expanding. Pharmaceutical companies expanded in foreign markets in order to survive.. Importance of international marketing strategy has been rising due to 1) increase of foreign market percentage from total world market, and 2) foreign competition. 3  Standardization and Adaptation Review in Pharmaceutical Marketing Promotions Accordingly, pharmaceutical companies marketing strategy should be coordinated in different countries. Reviewing of an immense argumentation with regard to appropriate marketing strategy in different markets of different countries. There are two marketing strategy choices, i.e., either standardization or adaptation. 4 1.1. Historical Argumentation between Standardization and Adaptation 5  There is an argument between standardization and adaptation of activities of companies working in more than one country in international marketing. Levitt (1983) argued that “a powerful force drives the world toward a converging commonality, and that force is technology”. Boddewyn et. al. (1986) argued that there are national differences in habits, regulations, tastes and technical requirements which prevent standardization. 6 According to Levitt; there is a homogenous international market in the world, the driving force is advanced technology and standardization is the right way in international marketing. On the other hand, according to Boddewyn, this homogeneity is absent. In fact, academics have an orientation towards adaptation, because of their viewpoint, i.e., 1) absence of international homogenous market and 2) absence of similarities of consumers and 3) standardization are impossible. In contrast, practitioners are fluctuating between standardization and adaptation. 7  1.2. Globalization and Standardization The term “globalization” came from the term “global” which means world scale in the late 19th century. It became popular in the early 20th century with high rate of publications. From 2002 to 2008, publications correlated to this topic were more than 1100 publication per year. 8  Globalization and Standardization Global companies are seeking to standardize their products and try to keep standardization of their issues with high degree, because of international market homogeneity. Standardization means “creating uniform business processes across various divisions or locations”. This is done with considering that the company knows what is good for the customer 9  1.3. Adaptation Most researchers apply the term adaptation as the extreme opposite of standardization. According to Mediana and Duffy, 1998; adaptation is “obligatory modification of standards (tangible and/or intangible attributes) of products intended for the country’s inner target market with the aim of making the product suitable for conditions of foreign market environment”. Adaptation is setting different strategies of the marketing mix. 10  Adaptation For international advertising strategy, adaptation for each market should be done, as a separate entity. That action is taken because each market has its own politics, legalizations, culture, economic situation and different medical needs. Academicians are considered with a contingency approach. The decision is not to completely standardization or adaptation concerning the applied strategy but depends on the actual situation in a particular market. This situation depends on different environmental factors. 11 Both academics and practitioners know effect and importance of culture in international marketing management, because they recognize local differences between countries and nations and the actual need for localization and using the right communication. However, extending localization has its own drawbacks, e.g., high cost. They also recognize standardization benefits. 12 13 1.4. Factors that Affect Standardization and Adaptation There are a lot of factors that affect the degree of standardization and adaptation of marketing promotion of pharmaceutical companies because they affect the communication process between companies and their customers. 14 Toyne and Walters (1989) refer to the following factors such as cultural, language, social, legal, competitive and economic differences. De Mooij (1994) agreed with Toyne and Walter that legal, cultural, social, economic issues and competition have a great effect on standardization and adaptation. In addition, he argued that the choice of complete standardization or adaptation of marketing strategy is rare, where the right choice is the applied degree of standardization or adaptation. This degree is related to a lot of factors, such as: product category, product life cycle, branding, positioning of brand, media, market affluence 15  Researchers are different in their definitions, recognition and categorization of different factors that can affect marketing strategy. All of them mentioned factors that affect the marketing promotion strategy of pharmaceuticals in different degrees. Although there are apparent differences in the classification of mentioned factors by researchers, the difference between researchers is due to the orientation of their categorization of these factors. We can summarize them into product-related factors, hosting market-related factors and company related factors. 16 Product related factors Hosting market related factors Company related factors -Product category -Country's culture and social -Competitiveness -Lifecycle stage specificity e.g., religion -International -Branding -Language experience -Brand positioning -Regulations -Corporate governance -Product description -Legal issues attitude and uniqueness -Politics -Orientation of -Promotional -Market prosperity international goal purposes and -Economic differences -The cost of research creativity -The degree of urbanization and development - Pending on product -The structure of distribution system -Financial issues -Allocated -The degree of technology -The nature of the communication tools -Price sensitivity company's products and supportive -Geography activities -Competitions -Control by the state and barriers 17  PESTLE Analysis is a tool used to gain a macro picture of an industry environment. 18 Accordingly, the right way is represented in the balance between the two approaches. In other words, it is represented in the integration between globalization and localization. Because companies can gain the benefits of both global and local views. By that, the marketing promotion process will be able to act in a flexible way at the tactical level relative to the local market and also in an integrative way at the strategic level relative to global orientation. What is the solution, and what should pharma marketers do? The answer is in the Next Lecture. 19  Lecture 6 Associate Professor Dr. of Pharmaceutical Management and Economics Mohamed Bahlol 20  Lecture 6 Associate Professor Dr. of Pharmaceutical Management and Economics Mohamed Bahlol 21  2. Glocalization philosophy Glocalization (a portmanteau of globalization and localization) firstly appeared in the nineties of the twentieth century by Japanese scholars who used the Japanese word dochakuka in a sociological review. It means adapting and framing a technique to a certain local condition. Afterwards, it gained the interest of sociological communities by Roland Robertson and Zygmunt Bauman, who defined it as “simultaneity – co-presence – of both universalizing and particularizing tendencies” and “tampering effects of local conditions on global pressures”. For example, global epidemic diseases are managed according to local reality and context. 22  Lecture 6 Associate Professor Dr. of Pharmaceutical Management and Economics Mohamed Bahlol 23  Glocalization and Pharmaceutical Marketing Promotion There is an important relationship between pharmaceutical company strategies such as Glocalization and pharmaceutical marketing promotion tools. These tools will not be effective (in relation to loss of company resources) if they are wrongly directed. They may be imperfectly directed in several ways; e.g., sending an inappropriate message to physicians, pharmacists and patients; not matching customers’ needs; erroneously selecting and depending in different countries on certain promotion tools that may be extended to a serious and dangerous health situation when the company targets all its effort to wrong customer segment due to lack of correct identifications of the target segment. This is related to different health issues, e.g., genetic, racial and ethnic differences, communicable, and non-communicable diseases (NCDs). 24 Pharmaceutical promotion should not ignore genetic differences of diverse ethnic and racial groups. Needs and responses of medications may be different due to genetic factors that have significant differences with regard to clinical effectiveness, side effects, adverse drug reactions (ADRs) and metabolism profiles of important drugs. According to these factors, pharmaceutical companies must take into account those implications related to management policies which will affect therapeutic substitution, step-care protocols and formulary implementation 25  1. Alter response to drugs Information indicates that patients of a certain racial or ethnic group may be at greater risk than patients of other groups if they take an equivalent drug because either the specific drug (e.g. antihypertensive agents) may not be as effective or a substantial adjustment of dose is necessary to avoid underdosing or overdosing, or dosage form (e.g. elixir). 26 There are a lot of complex and interdependent factors that alter the response to drugs. Genetic factors, which are the major determinants of variability in response to a drug, are due to inherited differences in drug targets and metabolism. Psychological and cultural factors may affect adherence to or efficacy of a certain drug therapy. Environmental factors may have an effect on drug metabolism, e.g., climate, smoking, and alcohol consumption. 27 1. Examples include cardiovascular drugs (beta- blockers, calcium channel blockers, angiotensin- converting-enzyme inhibitors and diuretics), such as upon using beta-blockers (Propranolol), only half- Caucasians are sensitive to effects on heart rate and blood pressure in comparison with Chinese. Also, whites have more antihypertensive effects in comparison with blacks. 2. A. Central nervous system drugs (antipsychotics and antidepressants), e.g., upon using antidepressant (Clomipramine), and B. analgesics (codeine and acetaminophen), Asians have higher severity and incidence of side effects than whites. 28  2. Communicable diseases Pharmaceutical promotion is related not only to genetic differences but also to communicable and NCDs. E.g., Hepatitis C Virus (HCV) is a dangerous communicable disease. HCV has multiple genotypes that have been isolated from different countries in the world. There are at least six different genotypes and each one of them has multiple subtypes. 29 Characterization and identification of HCV types and subtypes have great implications for development of HCV vaccine and management of treatment. It is known that HCV genotypes are very important epidemiologic markers and can change specificity and sensitivity of diagnostic assays for HCV detection. In selecting patients for interferon treatment, deciding the length of treatment and the appropriate management of chronic cases, HCV genotyping is beneficial. 30 There are fundamental regional differences in the distribution of HCV genotypes and their relative recrudescence varies from one geographic region to another, e.g., HCV genotype 4 is prevalent in the Middle East and North Africa, HCV genotypes 7, 8 and 9 are present only in Vietnam, and HCV genotypes 10 and 11 are present in Indonesia. Management and duration of treatment of interferon dose and the response of treatment are affected by HCV genotypes. These indisputably have a great effect on the pharmaceutical promotion of adequate vaccines and drugs according to different HCV genotypes. 31  3. Non-communicable diseases On the other hand, if we talk about NCDs, the following case will give us a good explanation. Most experts include only four NCDs: heart disease and stroke; diabetes mellitus; cancer and chronic lung diseases. The common causes of these diseases are dietary patterns, energy- rich foods, salt intake, alcohol and tobacco. These diseases were found in both developed and developing countries. 32 “The analysis and also the interpretation of socio- economic factors are different in developed and developing countries.” On the one hand, in developed countries, these diseases mainly overspend lower social class and in developing countries, they are principally observed in higher social class. In developed countries, the higher social class has sufficient knowledge of health education to control dietary patterns and avoid these diseases, but the lower social class has a lower level of health knowledge with high consumption of uncontrolled food intake due to the availability of these foods and their ability to buy them. 33  On the other hand, in developing countries, there is a lack of health knowledge in both higher and lower social classes, where the higher social class has the ability to purchase and the lower class cannot afford thereof. Although the lower social class does not have enough health knowledge, there is a lower disease rate, because of low total income that cannot enable it to buy these foods. 34 Thank you for attention ! Associate Professor of Pharmaceutical Management and Economics Dr. Mohammed Bahlol 35